15,043 Died Waiting For Disability Determination

     From today's Wall Street Journal:

The backlog of applications for disability benefits is so big the Social Security Administration has a special code—DXDI—for appeals dismissed because the applicant died waiting. Since 2005, the agency has made 15,043 DXDI designations.

A Race To The Bottom Garners Only A 6% Market Share For Binder And Binder

     That Wall Street Journal article on Binder and Binder indicates that they took in $88 million in fees for representing Social Security claimants last year which is a lot but that the total for everyone representing Social Security claimants was $1.4 billion. By my math, that means that Binder and Binder had only a 6% market share nationally despite spending $20 million on television ads and an untold amount on search engine advertising.

     Binder and Binder's influence goes beyond what its market share might suggest. Perhaps this would have happened anyway but several other firms are trying to operate nationally in ways somewhat similar to Binder and Binder and many other firms operating regionally are also cutting service to clients while ramping up advertising. It looks like a race to the bottom -- who can cut service the most so they can spend the most on advertising.

User Fee Stays At 6.3%

     The user fee imposed on those who receive direct payment of fees for representing Social Security claimants will remain at 6.3% in 2012.

Paying For Referrals

     From a press release:

Freedom Disability, a national Social Security Disability Advocacy group, has launched Freedom Cash Rewards, a unique online referral program designed to connect those who need Disability benefits to a premier advocacy service. Through this program, both the referrer and the person being referred would have the opportunity to earn cash rewards starting at $50. ...

[I]n addition to receiving high quality advocacy service for their Social Security Disability case, the disability claimant will also receive $50 once they have completed the initial interview with a Freedom Disability Advocate ...

     As the attorneys reading this know, paying for referrals is a good way to lose one's license to practice law. Of course, Freedom Disability is not a law firm.

Merry Christmas

Merry Christmas

Means Testing Social Security?

Is means testing Social Security a good idea? Kevin Drum at Mother Jones gives some cogent supply side reasons why it would be a very bad idea.

Merry Christmas

Commissioner On Budget

From: ^Commissioner Broadcast
Sent: Friday, December 23, 2011 2:37 PM
Subject: COMMISSIONER'S BROADCAST--12/23/11

A Message To All SSA And DDS Employees‪

Subject:  Budget Approved

Thank you for your patience during the latest budget negotiations and for handling the uncertainty professionally.  I am pleased to report that President Obama today signed the Omnibus appropriations bill.  The good news is that we know how much money we have for this fiscal year much earlier than we did last year.

Accounting for the across-the-board reduction that each agency had to take, we received a small increase of about $25 million over last year’s budget.  This budget increase does not pay for much of our more than $300 million increase in fixed costs, so it will be another very tight year.  We are in the process of making some difficult decisions so that we can accomplish our most important missions.  We will release revised budget allocations in January and expect only to make minor modifications through the remainder of the fiscal year.

Thank you again for working hard during this period, and I wish you all a wonderful holiday season with family and friends! 

                                                            Michael J. Astrue

                                                            Commissioner‪‪

Binder and Binder Advertising Expenses -- Off The Charts!

     The Wall Street Journal article yesterday contained some interesting information on Binder and Binder's operations. Their total revenues in 2010 were about $88 million, which is a stunning number, but almost as stunning to me was Binder and Binder's television advertising expenses, more than $20 million. As big as that number is, you must remember that television is only a part of their advertising expenditures. They also engage extensively in search engine marketing, which is also expensive. Their search engine marketing expenses are probably in the same ballpark as their television advertising expenses. This means that they are probably paying out something over 40% of their gross revenues on advertising. Spending that kind of money on advertising explains their service delivery problems. They have little money to spend on customer service after paying for all the ads. 

     How does Binder and Binder's advertising costs as a percent of their revenue compare to the average Social Security practice? I can only make a rough guess here but I think it safe to say that Binder and Binder is incredibly far off the chart.

     Don't you have to wonder about any enterprise that spends such a huge percent of its revenues on advertising? Who else does this? Luxury retailers, maybe?

     By the way, I'll also take a guess that Binder and Binder's profit margin is small.  How can they have much profit, spending that much on ads? I wonder how well they''re doing in the current downturn in fee payments.